Indian Subsidiary Setup – Complete Incorporation and Compliance Guide

Indian Subsidiary Setup is the most preferred route for foreign companies planning long-term operations in India. Establishing an Indian subsidiary requires strict compliance with the Companies Act, FEMA regulations, RBI reporting, and Indian tax laws.

India’s rapidly growing economy, liberal FDI regime, and strong legal framework make it an attractive destination for global businesses. However, improper structuring or missed compliances during Indian subsidiary setup can lead to regulatory penalties and operational delays.

At Jain Prachi & Company, we provide end-to-end assistance for Indian subsidiary setup, from incorporation to post-registration compliance.

Why Indian Subsidiary Setup Is the Preferred India Entry Route

Indian subsidiary setup offers multiple strategic advantages:

• 100% foreign ownership permitted in most sectors

• Independent legal entity with limited liability

• Access to India’s skilled and cost-effective workforce

• Ability to enter contracts, hire employees, and raise invoices

• Legal repatriation of profits under FEMA

Indian subsidiary setup also enables smooth business expansion without operational restrictions.

Key Legal Requirements for Indian Subsidiary Setup

To complete Indian subsidiary setup, the following statutory conditions must be fulfilled:

Note: The entire Indian subsidiary setup process is online.

Step-by-Step Indian Subsidiary Setup Process

Step 1: Document Collection for Indian Subsidiary Setup

Documents required for Indian subsidiary setup include:

• • Passport and address proof of directors

  • Board resolution from foreign parent company

  • Proof of registered office address in India

Step 2: Digital Signature and Name Approval 

DSC is mandatory for all directors to digitally sign incorporation documents.

Step 3 – Incorporation Through SPICe+ Form

A unique company name is reserved through the MCA portal with “Private Limited” as the suffix.

Step 4: Filing SPICe+ Form 

SPICe+ is a consolidated form covering:

• Company incorporation

• PAN and TAN allotment

• EPFO and ESIC registration

Step 5: Issue of Certificate of Incorporation 

Upon approval, the Registrar of Companies issues:

• Certificate of Incorporation

• Company Identification Number (CIN)

• PAN and TAN

Step 6: Post-Incorporation Compliance After Indian Subsidiary Setup

• After Indian subsidiary setup, the following are mandatory:

  • Opening of company bank account

  • Appointment of statutory auditor

  • FDI reporting through RBI (Form FC-GPR)

  • GST registration, if applicable

Taxation Under Indian Subsidiary Setup

• Corporate Tax: 22% (normal rate) or 15% (for new manufacturing units) 

• Dividend Tax: Taxable in the hands of shareholders 

• Withholding Tax: Applicable on foreign remittances 

• Transfer Pricing: Applies to inter-company transactions 

We ensure full compliance with the Income Tax Act and FEMA guidelines. 

RBI and FEMA Compliance for Indian Subsidiary Setup

• Foreign-owned subsidiaries must comply with FEMA and RBI regulations, including:

  • Advance Reporting Form (ARF) within 30 days of fund receipt

  • Form FC-GPR within 60 days of share allotment

  • Valuation certificate from a Chartered Accountant

  • Annual FLA return reporting foreign liabilities and assets

  Non-compliance may attract penalties under FEMA.

Why Choose Jain Prachi & Company for Indian Subsidiary Setup

• Jain Prachi & Company offers specialized advisory for Indian subsidiary setup, including:

  • Incorporation and MCA filings

  • RBI and FEMA compliance

  • Tax registrations and advisory

  • Post-incorporation compliance management

  • Transparent pricing and timely execution

  We act as your trusted compliance partner in India.

Start Your Indian Subsidiary With Confidence 

We have successfully assisted companies from the USA, UK, Singapore, and Europe in completing Indian subsidiary setup efficiently and compliantly.

📧 Email: contactus@jainprachi.com
🌐 Website: https://jainprachi.com

FAQs on Indian Subsidiary Setup

Q1. Can 100% foreign ownership be held in an Indian subsidiary?
Yes, most sectors allow 100% foreign ownership under the automatic route.

Q2. Is physical presence in India required for Indian subsidiary setup?
No, the entire process can be completed online with notarized documents.

Q3. How long does Indian subsidiary setup take?
Typically 10–15 working days, subject to document readiness and approvals.